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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (48913)	6/24/1998 12:24:00 PM
From: Lee	Read Replies (2) \| Respond to of 176387

Hi Chuz,..Re:<<commodities >> An interesting article which puts the Asian impact somewhat in perspective relative to basic commodities can be found at the following URL. ms.com Global: Asia and Commodity Prices Go to Archives and then select May 22 Regards, Lee

To: Chuzzlewit who wrote (48913)	6/26/1998 9:10:00 PM
From: Geoff Nunn	Read Replies (2) \| Respond to of 176387

Chuz, here is an exchange between you and Jim Kelley: JK: IMO, it was a battle for perceived market share not long term sustainable profits. Chuz: I believe that the only reason a company engages in a market share battle is to establish long-term sustainable profits at the cost of near term profits. Otherwise, what is the point? Your statement seems to be premised on: 1. All firms are profit maximizers. 2. All firms have a long term (as opposed to short term) outlook. You're probably not saying that, but then what are you saying? There are various alternatives to profit maximization which have been suggested to explain the behavior we observe of U.S. corporations. A classic book by two economists, Burley and Means, argues that stockholder control in many large public firms is very weak due to diffused ownership. When ownership is fragmented, managers enjoy a great deal of autonomy because they effectively control the Board of directors. B&M contended that the managers of these firms don't necessarily own much stock, and don't necessarily run these companies in the interests of shareholders. Instead, they run them to maximize their own self interest. If you buy the B&M argument, then it is quite possible that such firms may engage in sales maximization (market share growth), empire building, feathering the nest of mgt at the expense of shareholders, etc. The B&M hypothesis would not apply to firms like MSFT, Dell or Oracle. These firms, one could argue, exhibit the characteristics of an individual proprietorship because they are owner managed. It also would not apply to a firm with large block ownership like Walmart. The Walton family owns enough stock to dominate the company (whether it chooses to directly manage it or not). Therefore, we can be fairly confident that Walmart is run for the benefit of shareholders not managers. B&M as I recall felt that stockholder control of a firm requires that a small group of shareholders own something like 15-20% of the stock in order to exercise effective voting control. I think it's very easy to give historical examples of firms which were not profit maximizers. During the 19980's, for example, we saw a great deal of nest feathering, e.g., golden parachutes, anti-takeover defenses enacted which were harmful to shareholders (poison pills), greenmail, etc. Its certainly true we don't see as much of that today. An explanation why there is less of it now is the growing importance of management stock options. I suspect you would agree that CEO's today are more attentive to "raising shareholder value" than they were just a decade ago. Switching subjects, my wife and I are in the process of moving (to Florida). Consequently, I've gotten way behind in reading the posts on the Dell thread. Hope to get caught up today. Geoff